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What Is Moving the Markets

LONDON (Reuters) - Stocks flatlined on Wednesday as investors used the last day of May to protect gains built up in what has been yet another lucrative month, while sterling fell after an opinion poll suggested the ruling Conservatives could lose seats in next week's UK general election.

HOUSTON/BOSTON (Reuters) - Exxon Mobil Corp has stepped up efforts to persuade investors to vote against climate-related proposals at Wednesday's annual meeting with a campaign of calling, writing and lobbying shareholders in person.

LONDON (Reuters) - Oil prices fell by 1 percent on Wednesday as rising Libyan production fueled concerns that OPEC-led output cuts are being undermined by several countries that are excluded from the deal.

(Reuters) - China's industrial engine cranked up again in May, reassuring investors worried about slowing growth in the world's second-biggest economy as it grappled with debt risks and tried to shake off a stinging ratings downgrade from Moody's Investors Service.

CARACAS/NEW YORK (Reuters/IFR) - Goldman Sachs Group Inc's statement that it never transacted directly with the government of Venezuelan President Nicolas Maduro when it bought $2.8 billion of bonds for pennies on the dollar was dismissed by the country's opposition on Tuesday as an effort to "put lipstick on this pig."

(Reuters) - The U.S. Supreme Court on Tuesday tightened rules on where injury lawsuits may be filed, handing a victory to corporations by undercutting the ability of plaintiffs to bring claims in friendly courts in a case involving Texas-based BNSF Railway Co.

It has been another quiet session for global equity markets, with S&P futures flat, as are European and Asian stocks, which is perhaps odd, as there was quite a bit of newsflow and, in the case of China, outright fireworks.

The main event in DM was the violent move in sterling, which as we first reported on Tuesday afternoon, tumbled for the first time this week after a YouGov poll showed Theresa May's Conservative Party may fall short of a majority. The currency's weakness boosted British equities, and the FTSE 100 Index rose even as miners and energy companies weighed on the broader European gauge after another night of sliding commodities in China.

"The return of U.S. and UK markets yesterday (after holidays) saw a little bit of weakness creep in as we head into month end and what has been a positive month for markets, with records broken on an almost daily basis," said Michael Hewson, chief markets analyst at CMC Markets. "This soft tone looks set to be carried over this morning," he said.

Uncertainty about the reliability of polling, however, helped contain the pound's retreat, which has since regained all of its overnight losses, but the moves are a reminder of the potential risks surrounding a series of national elections in Europe this year.

Another key overnight event, one which helped the Shanghai Composite close higher, was a stronger than expected Chinese Mfg PMI, as well as a Non-manufacturing PMI which rose in May. Specifically, China's NBS May manufacturing PMI came in at 51.2, same as the previous reading and slightly above exp ...

Update: after deleting the original tweet that kept much of Twitter, and most of the political media up all night, Trump followed up shortly after 6am with a tweet in which he tried a humorous spin on "covfefe":

"Who can figure out the true meaning of "covfefe" ??? Enjoy!" Trump tweeted at 6:10am ET.

Who can figure out the true meaning of "covfefe" ??? Enjoy!

— Donald J. Trump (@realDonaldTrump) May 31, 2017

Many were quick to ask just how many conspiracy theories Trump's question would start.

* * *

Trump's infamous late night tweeting appeared to finally cross into the twilight zone on Wednesday morning, when moments after midnight, president Trump sent out a bizarre unfinished tweet with a typo.

It took Paul Singer's Elliott Management less than 24 hours to raise $5 billion earlier this month, however it is safe to say he won't be using any of that cash to buy stocks at current prices, or even BTFD. Instead, as he writes in his Q1 letter to investors, the legendary hedge fund manager thinks "that it is a good time to build a significant amount of dry powder,"

The reason for that is if, or rather when, Trump's pro-growth agenda fails to be implemented, "all hell will break loose" and that a recession looms as the artificial crutches propping up risk assets are pulled out:

Given groupthink and the determination of policy makers to do 'whatever it takes' to prevent the next market 'crash,' we think that the low-volatility levitation magic act of stocks and bonds will exist until the disenchanting moment when it does not. And then all hell will break loose (don't ask us what hell looks like...), a lamentable scenario that will nevertheless present opportunities that are likely to be both extraordinary and ephemeral. The only way to take advantage of those opportunities is to have ready access to capital.

Isolating the impact of the "Trump Put" as described recently by Deutsche Bank, Singer writes that "although the growth agenda of the Trump administration is slow to get off the ground, markets still anticipate that much of it will be enacted, sooner or later." And yet, according to most metrics, the Trump trade has already been priced out of most markets with the notable exception of equities, which as Bank of America pointed out in a note last week, are now the "last one sta ...

Europe still has not realized that the terror which struck its metropolis was a war, and not the mistake of a few disturbed people who misunderstood the Islamic religion.

We are apparently not ready to abandon our masochistic rules of engagement, which privilege the enemy's people over our own.

It appears that for Europe, Islamic terrorism is not real, but only a momentary disruption of its routine. We fight against global warming, malaria and hunger in Africa. But are we not ready to fight for our civilization? Have we already given up?

This long and sad list is the human harvest of Islamic terrorism on Europe's soil:

And it does not take into account the hundreds of Europeans butchered abroad, in Bali, in Sousse, in Dakka, in Jerusalem, in Sharm el Sheikh, in Istanbul.

But after 567 victims of terror, Europe still does not understand. Just the first half of 2017 has seen terror attacks attempted in Europe every nine days on average. Yet, despite this Islamist offensive, Europe is fighting back with teddy bears, candles, flowers, vigils, Twitter hashtags and cartoons.

This post presents our quarterly update of the economic forecasts generated by the Federal Reserve Bank of New York's dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since February 2017.

It's the last day of another not-too-shabby month for stocks, and everyone keeps talking about how tech has led the charge. Our call of the day says it's time to cut back on Silicon Valley's creations and buy stock sectors that have been unloved.

Scott Pelley is stepping down as anchor of the "CBS Evening News" to become a full-time correspondent on the Sunday prime time newsmagazine "60 Minutes," according to a person familiar with the matter.

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